West Virginia to return stimulus funds

West Virginia will have to return $2.5 million in leftover stimulus funds after federal officials rejected a state proposal to spend the money on a telecommunications project.

The state wanted to award the money to Citynet to help pay for a project that would give West Virginia direction connections, but the National Telecommunications and Information Administration rejected the proposal, according to the Charlestown Gazette.

Citynet, a Bridgeport, W.V.-based Internet provider, had hoped to use the $2.5 million — along with $7.2 million of its own money – to set up nine “GigaPop” facilities in West Virginia that would funnel data and connect to the national Internet “backbone” in Columbus and Pittsburgh

NTIA sent a letter to the state Jan. 16 that said the Citynet project did not comply with certain requirements and state officials did not answer questions or provide sufficient details about the project.

Officials also did not submit a formal request to extend a Dec. 31 deadline to use the funding.

“We had this money allocated to us, and I was hopeful the federal government would have allowed us to keep the money and use it to expand broadband access,” Sen. Bob Williams told the newspaper. “This was a really good project that would have brought broadband to a large number of folks throughout West Virginia and created some additional competition to marketplace.”

West Virginia received more than $126 million in 2010 to expand high-speed Internet statewide.